Recently, a proposal has been actively discussed when providing social support to citizens to abandon the concept of “living wage” and focus on the “minimum consumer budget” indicator.
Read more about this in the material “They want to replace the living wage with a minimum consumer budget. Is it good or bad?"
In this material we will talk about what the living wage is and what its size is.
Differences in indicators
The minimum wage is a fixed indicator that reflects the minimum wage for Russian citizens. It is approved by the government of the country. The minimum wage is the same for the entire state; wages cannot be paid below this figure. But the law also explains possible exceptions that may arise in certain situations. The subsistence minimum is the minimum amount of earnings that a citizen will need to meet the minimum level of needs.
The federal minimum wage is established for the entire territory of the Russian Federation. Employers are required to pay wages to employees in an amount not less than a fixed amount. Since the territory of Russia is large and located in different climatic conditions, the standard of living differs by region. Therefore, local authorities can set the minimum wage in a larger amount than the basic indicator for the country, but not less.
Regional levels are used for specific regions - the Far North and territories that are equivalent to it, including highlands and deserts. The minimum wage also differs for capital districts. The minimum wage in the Russian Federation is regulated by Law No. 82, adopted in 2000.
Many other payments to citizens depend on the monthly salary and the minimum wage:
- earnings;
- compensation for sick leave;
- pensions;
- payments to pregnant women;
- child care payments;
- compensation.
What the minimum wage and the living wage have in common is that both indicators are designed to guarantee citizens a normal existence and satisfaction of basic needs.
The main differences between the minimum wage and the PM:
- The minimum wage is a minimum fixed indicator of income for performing labor activities.
- With the help of PM, the standard of living in different cities and regions of Russia is assessed through the consumer basket. That is, how much food can you buy in a certain area for the same amount. Or how much the same set of products will cost in each region.
The living wage is based on the consumer basket - the monetary value of all goods and services that are needed for a normal life. It includes:
- food, utilities, non-food products;
- other mandatory payments to the government or essential service providers.
Therefore, the concepts of minimum wage and minimum wage rather complement each other.
Legislative standards
Since the correct calculation of the cost of the minimum food package directly affects a number of statistical indicators, it is carried out by specialists from Rosstat. The cost is recalculated quarterly, taking into account real changes in prices for consumer goods over the past period.
The first law on the consumer basket was adopted in 2006 - Federal Law No. 44. Previously, since 1992. The living wage for residents of Russia was calculated in accordance with the methodological recommendations of the Ministry of Labor and Social Protection.
In 2012, legislation No. 44 was automatically repealed due to the entry into force of the Federal Law on the consumer basket No. 227. This law regulated the principles for calculating its cost and configuration. It also contains a list of basic products necessary for normal human life. In Art. No. 2 of Federal Law No. 227 indicates the amount of consumption in kilograms per person of different ages.
Legal documents
The minimum wage has been enshrined in federal law since 2000; before that, a new legislative act was issued each time. Since then, annual changes in the law concern only the amount of the lowest income for working Russians. For 2021, the minimum wage was 11,280 rubles, and from January 1, 2021 it will be increased to 12,130 rubles. The cost of living in 2021 was higher than the minimum wage. For 2021, the cost of living is 11,185 rubles, that is, it is 95 rubles lower than the federal minimum wage.
The size of the regional minimum wage is determined on the basis of Article 133 of the Labor Code of the Russian Federation, and the indexation of the indicator is supported by Article 421. Wages are not the same thing as the minimum wage. The salary consists of salary, bonus payments, allowances, and regional coefficients. If all these payments in total exceed the minimum wage, then the employer can legally reduce the salary.
The minimum wage may be less than salary in such situations:
- When the employee is not on full-time work. In this case, the salary is proportional to the time worked.
- If a citizen works part-time in several organizations. Moreover, his total income with full-time work cannot be less than the minimum income level.
The cost of living is regulated by Federal Law No. 134. The indicator is used to assess the lives of citizens and for statistics on the number of poor people in the country. The PM serves as the basis for the formation of the minimum wage.
Money
It has already been said that the cost of living, at least in monetary terms, is constantly changing. You have to find out accurate information for a specific period of time. At the moment, this figure has increased slightly. At least for some people.
In the 1st quarter of 2021, there were 9,776 rubles per capita. It is with this amount that you will have to provide for your life. If you think about it, not so much (taking into account the constant rise in prices in Russia). But pensioners are less fortunate. For them, the monthly minimum was only 8,025 rubles.
Two more categories of citizens for whom the minimum monetary value has different meanings are the working-age population and children. The first are entitled to 10,524 rubles, and the second - 9,677 rubles. Such standards are currently established in Russia. Now it is clear how much the cost of living is for 2021 (Q1) in monetary terms. But don’t rush to rejoice!
When the minimum wage may not reach the subsistence level
The Decree “On National Goals and Strategic Objectives of the Development of the Russian Federation until 2024” defines ways to combat poverty in the Russian Federation. The minimum wage is set for the next year based on the cost of living calculated for the second quarter of the previous year.
Since the minimum wage has been equalized with the minimum wage, employers cannot set wages for their employees that are less than the subsistence level. The monthly minimum income must now include the monetary size of the consumer basket. If for some reason the employee’s salary is less than the minimum wage, the employer must pay the missing amount through bonuses, allowances, or increase the salary by an additional agreement.
To form the minimum wage, the subsistence level of the second quarter of the current year is chosen for the following reasons:
- In the second half of the year, the inflation rate decreases. Because of this, the cost of living also decreases.
- According to statistics, it is the second quarter that reflects the average PM level for the year.
- After the second quarter, there are still 6 months left to distribute finances for the next year and wages to citizens of the Russian Federation who receive funding from the budget.
Consequences for employers in violation of the minimum wage law:
| Employer | Fine |
| IP | From 1 to 5 thousand rubles |
| Executive | From 10 to 20 thousand rubles |
| Legal face | From 30 to 50 thousand rubles |
Sanctions are imposed on the basis of Article 5.27 of the Code of Administrative Offenses.
Composition and structure for citizens of different ages
The composition of the consumer basket for 2021 is still regulated by the provisions established by Law No. 227. Previously, it was planned to review the food package every five years. But over the past seven years, no changes have occurred regarding the structure and composition of the consumer basket. In December 2021 Federal Law No. 421 was adopted, according to which the next revision of the list of products and the number of consumption standards should occur no earlier than December 31, 2020. This is due, first of all, to the internal economic problems that began in 2014. Consequently, in 2021 the composition of the consumer basket will remain unchanged.
For adults, children and pensioners, the minimum annual consumption of essential products is:
| Product name | Consumption by adults | Pensioners | Children |
| Bakery, pasta and cereals | 126 kg | 98 kg | 77 kg |
| Potato | 100 kg | 80 kg | 88 kg |
| Vegetables | 114 kg | 98 kg | 112 kg |
| Fruits | 60 kg | 45 kg | 118 kg |
| Sugar and confectionery | 23 kg | 21 kg | 21 kg |
| Meat | 58 kg | 54 kg | 44 kg |
| Fish | 18 kg | 16 kg | 18 kg |
| Dairy | 290 kg | 257 kg | 360 kg |
| Eggs | 210 pcs. | 200 pcs. | 201 pcs. |
| Oils and fats | 11 kg | 10 kg | 5 kg |
| Tea and spices | 5 kg | 4 kg | 3 kg |
As you can see, the consumer basket in Russia for 2021 is different for different categories of citizens. This differentiation occurs due to the different needs of people of different ages in certain product groups. For example, as can be seen from the table, the minimum consumption of fruit and milk by children is much higher than that of working people or pensioners. Working-age citizens, on the contrary, consume more flour products, cereals and meat.
But these calculations, made in 2012 by Rosstat experts, do not at all coincide with the size of the minimum consumer basket in Russia, calculated by medical specialists. These data are shown in the table below, and for clarity, the average level of food consumption in the Soviet Union in the mid-1980s is shown nearby.
| Product name | Minimum intake for adults in 2021 | Ministry of Health regulations | Consumption rate in the USSR |
| Bakery products and cereals | 126 kg | 96 kg | 110 kg |
| Potato | 100 kg | 90 kg | 105 kg |
| Vegetables | 114 kg | 140 kg | 146 kg |
| Fruits | 60 kg | 100 kg | 80 kg |
| Sugar | 23 kg | 24 kg | 38 kg |
| Meat | 58 kg | 73 kg | 84 kg |
| Fish | 18 kg | 22 kg | 20 kg |
| Dairy | 290 kg | 325 kg | 380 kg |
| Eggs | 210 pcs. | 260 pcs. | 280 pcs. |
| Oil and fats | 11 kg | 12 kg | 13 kg |
| Tea and spices | 5 kg | 4 kg | 5 kg |
As you can see, Rosstat’s consumer basket is somewhat different from that recommended by the Ministry of Health for the rational nutrition of a working person. It only characterizes the possibility of living in conditions of austerity with a minimum acceptable income.
Where is the PM level taken into account?
In general, in Russia a living wage is needed in order to:
- assess the standard of living of citizens of the Russian Federation when implementing a program to improve the economy in the state;
- justify the minimum wage at the federal level and the minimum pension;
- establish scholarships, social benefits and other payments assigned from the federal budget;
- form the federal budget.
The living wage for the regions of the Russian Federation serves for:
- determining the quality of life of citizens in a certain region and the success of the program to improve living conditions;
- providing financial support for low-income families;
- formation of the regional budget.
Also, the PM for the region is needed in order to identify suitable vacancies for registered unemployed persons in employment centers.
Not food
What are the essential goods? And what is included in the list of non-food minimums? This includes:
- outerwear (coat);
- costume and dress component (upper);
- underwear;
- hats;
- hosiery products;
- shoes;
- stationery (including school supplies);
- bed sheets;
- household goods;
- essential goods (medicines, sanitary items).
Accordingly, everyone is also entitled to a certain number of them. Able-bodied citizens can count, accordingly, on the following indicators (the “life” period in years is indicated in quotes, pieces and pairs of components are taken into account):
- 3 (7,5);
- 8 (4);
- 9 (2,4);
- 7 (1,5)
- 5 (5);
- 6 (3,3);
- 3 (1);
- 14 (7);
- 19 (10,4);
- 10% of expenses for non-food products.
What do minimum wages and PM affect?
The minimum wage and the cost of living affect the following payments:
- Wage. In 2021, a citizen cannot receive an income per month below the established figure. If the salary is below the subsistence level, the employee has the right to file a complaint with the appropriate organization. After this, sanctions are applied to the company owner and fines are imposed. At the same time, real earnings may be lower than the minimum wage if a citizen works part-time, does not meet the time and labor standards, or works part-time.
- Benefits. Benefits for pregnancy, childbirth, child care up to 1.5 years old, and sick leave payments depend on the minimum income.
- Taxes. The amount of taxes also depends on the minimum wage. As the minimum wage increases, tax deductions increase.
- Regional coefficient . Additional payments are assigned to those citizens who work in special climatic zones.
Minimum wages can have a negative impact on small businesses. Entrepreneurs are not able to pay salaries in this amount. In addition, a number of citizens have reduced motivation to develop and improve professional skills.
If a Russian’s pension is less than the minimum subsistence level, then the payments reach the required level. The pensioner will need to contact the social protection fund at the place of residence or the Pension Fund and submit a written application.
about the author
Klavdiya Treskova - higher education with qualification “Economist”, with specializations “Economics and Management” and “Computer Technologies” at PSU. She worked in a bank in positions from operator to acting. Head of the Department for servicing private and corporate clients. Every year she successfully passed certifications, education and training in banking services. Total work experience in the bank is more than 15 years. [email protected]
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What to do if your pension is below the minimum?
If a pensioner has no other sources of income, and his pension is below the minimum amount established in the region, he can apply for social assistance. To establish the amount of the benefit, you will have to prepare a package of documents that will confirm the size of the pension received, the pensioner’s residence in the region on a permanent basis (registration or temporary registration) and the absence of other sources of income.
Depending on whether the pension is lower than the federal one or established in the region, a subsidy may be assigned at the federal or local level. Its size is determined on the basis of Law No. 178-FZ.
Also see “ Where to apply for a social supplement to your pension .”
There is no point in postponing your application, since benefits are accrued only from the next month after your application. Benefits will not be accrued for the months preceding the submission of the application. Since the minimum amount is recalculated annually, you will have to apply for the subsidy again after a year.
Comments: 21
Your comment (question) If you have questions about this article, you can tell us. Our team consists of only experienced experts and specialists with specialized education. We will try to help you in this topic:
Author of the article: Klavdiya Treskova
Consultant, author Popovich Anna
Financial author Olga Pikhotskaya
- Yuri
07/13/2021 at 22:49 Why in Ryazan do I get paid PM differently every month?
Reply ↓ Anna Popovich
07/19/2021 at 16:11Dear Yuri, every quarter the amount of the subsistence minimum is approved by Government Decree. Its value is also influenced by seasonal fluctuations in food prices, economic, demographic, social and other factors.
Reply ↓
04/18/2021 at 10:47
Hello. The cost of living in our region is 35,000, the salary minus income tax is 31,000. Is this legal?
Reply ↓
- Anna Popovich
04/18/2021 at 20:33
Dear Lilia, according to the law, the minimum wage in a constituent entity of the Russian Federation cannot be lower than the minimum wage, and not the subsistence level.
Reply ↓
09.10.2020 at 00:50
Tell me, I’m a pensioner with a non-working pension 14915, this includes children’s benefits. I have a minor child. It turns out that my child’s living allowance is 1920 rubles. And I read that it should be 11200. Am I understanding correctly or am I confusing something. And where should I contact about this issue?
Reply ↓
- Anna Popovich
09.10.2020 at 10:12
Dear Natalya Pavlovna, for a full consultation, we recommend contacting the social protection department of your city.
Reply ↓
10/08/2020 at 01:04
I wanted to know that we are a family of 4 people, husband, wife, daughter and son. My husband’s salary is a maximum of dirty 36 thousand. I’m on maternity leave. And I have two children. We were told that in the Krasnodar region the cost of living should not exceed 44 thousand. And as I read, they wrote that the amount is then divided by 3 and then the number of family members. Then it’s rude my husband says 35,000 + I was paid maternity leave this month 18,000 = 53,000 thousand. We do everything by 3 = 17.700 and divide by 4. It turns out 4.417. So, or am I wrong about something???
Reply ↓
- Anna Popovich
08.10.2020 at 17:03
Dear Daria, The cost of living is calculated as follows: SD (average per capita family income) = D (profit of all members): Km (Calculation period for 3 months): H (number of people).
Reply ↓
09.21.2020 at 18:43
Hello! Please tell me why the minimum wage is equal to the federal minimum wage, and not the regional monthly wage? In Vorkuta the PM is larger than the federal PM. Why then is the regional subsistence level calculated if all calculations are made according to the federal one?
Reply ↓
- Anna Popovich
09.22.2020 at 09:26
Dear Elena, the procedure for calculating the minimum wage is established by law and is regulated by Federal Law No. 82-FZ “On the minimum wage.”
Reply ↓
09.21.2020 at 11:55
Hello! Please tell me, I gave birth to a second child, we want to apply for additional one-time benefits, we need to collect documents, and it is written not to exceed one and a half subsistence minimum for three months, tell me how to calculate this?
Reply ↓
- Anna Popovich
09.21.2020 at 12:36
Dear Irina, each region has its own cost of living. We recommend that you use for calculations the Government Decree “On approval of Methodological recommendations for determining the consumer basket for the main socio-demographic groups of the population in the constituent entities of the Russian Federation” and the Federal Law “On the subsistence level in the Russian Federation” No. 134-FZ.
Reply ↓
09.18.2020 at 18:48
Can a pension be lower than the subsistence level?
Reply ↓
- Anna Popovich
09.19.2020 at 19:19
Dear Irina, all non-working pensioners whose total amount of material support does not reach the pensioner’s subsistence level (PLS) in the region of his residence are provided with a federal or regional social supplement to their pension up to the PMS amount established in the region of residence of the pensioner.
Reply ↓
06/04/2020 at 12:07
Can a working pensioner receive a salary of 3 minimum wages, or should it be fixed?
Reply ↓
- Anna Popovich
06/04/2020 at 14:50
Dear Boris, the current Labor Code establishes time-based, piece-rate and commission wages, from which we can conclude that wages may not be fixed. But at the same time, the amount of remuneration cannot be expressed in variable quantities - that is, even non-fixed remuneration must have an established monetary equivalent in Russian rubles, and not in the size and quantity of the minimum wage.
Reply ↓
04/19/2020 at 00:13
I have been working in a hotel since November 1, 2019. Due to the pandemic, the hotel was not closed for quarantine. I work. There are 5 shifts of 12 hours a month, a shift costs 1300 with a tax deduction of 13%. There are no more payments. How correct is this on the part of the employer. When the cost of living is 11 thousand. How can you live for a month on 5655 rubles? Is the Organization doing the right thing by forcing you to work, and even for such pennies?
Reply ↓
- Anna Popovich
04/20/2020 at 20:37
Dear Lina, as a general rule, the employer is obliged to give the employee the opportunity to work out the norm of working hours established by law and enshrined in the contract for a specified period, and at the same time, for working out the norm for a month, the employee must be paid a salary of at least the minimum wage. Moreover, even when maintaining a time-based wage system and summarized recording of working time, payment cannot be lower than the minimum wage. But this issue can only be resolved with a detailed study of the conditions of your work and the employment contract.
Reply ↓
03/30/2020 at 14:45
We need to lock up the deputies for a month, give them the minimum wage, and let them bring food according to their orders. Let's see how they howl. In another month they would have adopted a law on the minimum wage = 25,000 rubles.
Reply ↓
01/20/2020 at 21:01
If for some reason the employee’s salary is less than the minimum wage, the employer must pay the missing amount through bonuses, allowances, or increase the salary by an additional agreement.© Don’t you think this is wrong. A bonus is an incentive BONUS, and “hold out” the salary up to the minimum wage at the expense of a bonus, this means depriving the employee of INCREASED wages for high-quality and conscientious work. Instead of “reinventing the wheel” and deceiving the people by raising wages to the minimum wage with incentive bonuses, it is necessary to return to the Labor Code an article about equating the rate of the first grade to the minimum wage, which was in the previous Labor Code and which was removed from the new one, which is where the movement into poverty began...
Reply ↓
- Anna Popovich
01/20/2020 at 23:19
Dear author, in the commentary material we are only talking about legal literacy and the employer’s obligation to pay employees in accordance with the minimum wage. As for bonuses, they are also part of the salary in accordance with Article 129 of the Labor Code of the Russian Federation, which means that at their expense the legally established minimum wage level can be achieved and this is legal.
Reply ↓
Products
A huge role (and a large share of the population) is played by able-bodied citizens. It is already clear from the monetary minimum that such persons are entitled to the most resources and services. So this is where the biggest numbers will be.
First of all, you should pay attention to the set of products. The consumer basket indicates only the most necessary components. And it doesn’t matter whether you use this or that component or not. According to the minimum, able-bodied citizens are entitled (in kilograms):
- bread products - 126.5;
- potatoes - 100.4;
- vegetables - 114;
- fruits - about 60;
- sugar and “confectionery” - by 24;
- 58.5 meat products, 19 fish products;
- dairy products - almost 300 (more precisely, 290);
- 210 eggs;
- fats (margarine, butter, etc.) - 10.
Please note: bread products include a variety of cereals and pasta. Also included are legumes, bread, flour, and bakery products. Plus, about 5 kilograms are allocated for other “expenses”. This is our minimum set of products. Other food products include: salt, tea, coffee, various spices. In general, everything that can be eaten, as well as what is not included in the above detailed list.
Services
The physiological subsistence level for the working population does not end there. It remains to consider the mandatory services that every citizen should receive on average per year. All this is not so difficult to understand, but remembering the exact data is not easy! So, the mandatory services include:
- housing (18 square meters);
- heating (6.7 Gcal);
- water (cold and hot - 285 liters per day);
- gas (10 cubic meters/month);
- electricity (per month 50 kilowatts);
- transport (620 trips per year);
- “cultural” services (5% of expenses);
- other (15% of expenses).
All of the above is a social subsistence minimum for citizens. More precisely, it takes into account only what is necessary for the average able-bodied person in the country. But there is only one huge drawback in this matter. Which one? Let's figure it out now.
